Joint Aerospace Council & Legal Committee: Bankruptcy Issues in the Aviation Industry

Joint Aerospace Council & Legal Committee: Bankruptcy Issues in the Aviation Industry

On March 22 to over 40 registrants, AMCHAM Thailand Joint Aerospace Council & Legal Committee presented Bankruptcy Issues in the Aviation Industry. The Covid-19induced drop in demand for air travel caused a reckoning for airlines and the aviation industry as a whole. In this event a panel of aviation lawyers Waranon (Warren) Vanichprapa, Partner at DLA Piper; John Frangos, Partner at Tilleke & Gibbins; and James Bradley, Partner at K & L Gates; discussed airline bankruptcies from both a Thai law and international perspective.

Waranon (Warren) Vanichprapa, provided an overview on Thailand’s bankruptcy and rehabilitation law that came into effect during the Asian financial crisis, the case of Thai Airways rehabilitation, including key considerations for its debtors and how the company would restructure over five years.

John Frangos, stated that bankruptcy is endemic to the aviation industry around the world as it is vulnerable to major shock events and there is immense competition in the industry, especially in South East Asia. He explained the difference between bankruptcy and rehabilitation. In case of rehabilitation, airlines are still able to continue business and pay their debtors before being insolvent. He also gave detailed information on rehabilitation proceedings regarding validity of contracts, automatic stay, repossession, and seizing of assets.

James Bradley, provided an overview on Asia Pacific restructurings in the aviation industry covering Australia, Philippines, Indonesia, Malaysia, PRC, and Vietnam.

The event was followed by a question-and-answer session moderated by AMCHAM Executive Director, Heidi Gallant. Members asked questions on Thai Airways filing for Chapter 15 in the U.S. and the future of the airline industry post the pandemic.

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